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Monday, October 19, 2026

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@DOMOCAPITAL 3 clicks

DOMO Capital Management, LLC on X

Adjusted EBITDA should be lower than Q2 and last year's Q3 (this year's Q2 was actually higher than last year's Q3!). But EPS should definitely be above analyst estimates and could possibly top Q2 EPS. Market doesn't understand how the hedges on the specialty alcohol work. Q2 EPS were penalized simply because the price of ethanol fell a bit during Q2. Well... during Q3, the price of ethanol rocketed higher. Therefore, even though Q2 had a much better average crush margin than Q3, it's possible Q3 could have higher EPS due to how these hedges work. To be clear - on an annual basis - the hedging has no impact. $ALTO is just locking in profit margin. But since it's not hedge accounting... it has an impact on each quarter's earnings. ALTO's business is operating very well. They're posting quarter after quarter of profitable earnings. Q4 should be solid as well and crush margins are strengthening again. Once California E15 kicks in (1/1/2027) then margins will strengthen further. Additionally: It sounds like passage of farm bill that includes E15 is very likely by end of this year. Check out this Politico article highlighting how the GOP is likely to pass a ton of stuff before the end of the year: https://t.co/3VL4DjDnzy "Such a bill, he added, would be “giant” and would include “all the Republican priorities that we can get done.” The House approved a framework for a party-line bill over the summer that includes war funding, farm aid and election integrity incentives. But the push has so far run aground in the Senate Moreno said the threat of imminent Democratic control of either the House or Senate would jump-start matters — and potentially push Republicans to include a debt-ceiling increase as well." "Moreno said if Democrats win control of both chambers, Republicans should stay in session nonstop to pass GOP legislation — which could be a tall order given worries about poor post-election attendance. “If we lose the House and the Senate, we should be here from Nov. 9 until Dec. 31 with no break at all,” Moreno said. “Like, we’ll have turkeys here for Thanksgiving because we have to get this done.”"

Investor Letters

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LXS.DE: a 2028 sale it can force

Lanxess can force Advent to buy at least half its Envalior stake in April 2028, potentially raising about €745 million to reduce net debt.

LPTH $525M
Trade Ideas Flow 18 clicks

Build-A-Bear: A Narrower Path

Build-A-Bear's push into prestuffed toys and broader retail distribution tests brand stretchability, but recent results warrant caution.

BBW $303M
TSOH Investment Research 16 clicks
SKIN · long

Skinhealth Systems INC

SkinHealth Systems owns a dominant professional skincare consumables franchise but trades at roughly $115 million market cap and $255…

SKIN $73M
Value Investors Club 1 click

Do You Trust Apple?

Apple’s HomeView strategy ties Siri, privacy and smart-home control to consumer trust in its vision for the home.

AAPL $5T
Stratechery by Ben Thompson – On the business, strategy, and impact of technology. 3 clicks

Semtech Analyst Day Review

Semtech raised Q3 guidance and targets $3.2 billion of fiscal 2030 revenue, excluding upside from its AI data-center optical and copper…

SMTC $13B
CV's Substack 13 clicks

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